Japan's economy, which has had record deflation for much of the past two decades, has seen aggressive actions by Prime Minister Shinzo Abe to turn around the world's third-largest economy.

Japan's central bank, for instance, in April announced it would expand its purchase of long-term bonds and double the amount of money in circulation, all in an effort to boost inflation to 2% within two years and stimulate consumer and business spending.

Business capital investment during the second-quarter, however, slowed, undermining some of the gains made in consumer consumption and government spending.

The government data shows gross domestic product has grown now for three consecutive quarters, a sign that Abe's policies are working, supporters say.

The slowing growth in GDP, however, could put a hamper in the government's plan to double the sales tax from 5% to 10%. Abe had said he wanted to raise the sales tax to more quickly pay down the high public debt, which has now reached $1 quadrillion yen, or about $10.2 trillion.